Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

A few deals and negotiations for imported ferrous scrap at lower prices were reported in Pakistan on Friday. Most buyers were cautious and stepped back to gain clarity on global cues. 


On the other hand, domestic steel prices maintained an uptrend driven by high input costs and a depreciating currency. Pakistani rupee continued to depreciate against the US dollar to reach PKR162.59 on July 30, from PKR160.0 on July 26. The rupee has depreciated by 6.5pc from 152.3 on May 15.


Softening market in Turkey and China led to deals at $540-545/mt cfr Qasim early this week, after which Pakistani mills targeted $535/mt cfr Qasim Friday. The daily Davis Index for containerized shredded, Friday, dropped by $3/mt to settle at $542/mt cfr Port Qasim on low bids. The index dropped by $2.25/mt from last Friday. 


Possibility of another round of freight hike by major shipping lines, globally, in early August and potential Chinese export taxes on steel latest by September, boosted sentiments of steelmakers.  


In Turkey, mills lowered their bids after a few cargoes booked at lowered prices for the rest of August and September shipments. Turkish mills believe scrap supplies have eased. The index for the US-origin HMS 1&2 (80:20) Thursday was at $470.88/mt cfr Turkey, down $3.88/mt from a day prior. Despite a $15/mt slide in the Turkish bulk market, containerized offers to Asia are yet to reflect the same drop. Yards are citing a possibility of freight hikes in early August.


Sellers in the UAE resumed trades post-Eid at largely stable prices. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled unchanged at $500/mt cfr port Qasim. Trades for UAE-origin mixed #1 HMS and P&S were at $510/mt cfr Port Qasim.


The daily index for US-origin HMS 1&2 (80:20), Friday, settled at $497.5/mt cfr Port Qasim down $5.5/mt from Thursday and down $5/mt from the prior Friday. Containerized export offers dropped for the second successive week on the US East Coast. Softening demand is indicating a potential drop of $20-30/nt in US domestic prices in August. 


From prior Friday, the Davis Index for P&S 5ft rose $2/mt to settle at $552/mt cfr while the index for #1 busheling was at $572/mt cfr Port Qasim, up by $2/mt. The supply of high-grade scrap continues to remain tight resulting in almost no deals this week. 



A price hike for rebar on Thursday after trade resumption post Eid holidays pushed the weekly Davis Indexes for rebar to PKR164,500/mt ex-works Karachi and PKR163,500/mt ex-works Punjab, both up by PKR4,000/mt from July 23. Local rebar offers above PKR145,000-146,000/mt ex-works Lahore.



On Friday, major HRC producers including ISL and Aisha Steel hiked CRC and HDG prices by PKR5,850/mt ($36/mt). Effective July 30, mills would offer CRC at around PKR228,750/mt ex-works and HDG at PKR237,350/mt ex-works. 



The weekly index for domestic Bala billet jumped by rose PKR7,500/mt ($46/mt) to PKR137,500/mt ($846/mt) ex-works. The weekly Davis Index for G-60 billet at PKR146,000/mt ex-works Punjab, up PKR5,000/mt from the prior Friday.


Domestic scrap

The weekly indexes for Art Q toke scrap (equivalent to a mix of HMS and P&S) rose by PKR1000/mt to PKR101,500/mt ex-yard Lahore and Pure Q toke scrap (equivalent to shredded) rose by PKR1,000/mt to PKR103,500/mt ex-yard Lahore.


For Gadani shipbreakers, offers of scrapped vessels at $590-600/ldt cnf Qasim, up $10/mt from the prior week.


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